Tuesday, February 20

Takeover bid options return to Siemens Gamesa

Siemens Gamesa fails to stop his financial bleeding and his forecast of some new negative results during the first quarter of 2022 makes the eyes of the market return to rest on an option that is gaining strength: the exclusion bid by its parent company.

Hiding that its performance has been negatively affected by supply chain disruptions, which it now expects to last longer than initially anticipated, in the pandemic, and in the challenges during the launch of its platform Siemens Games 5.X, the renewable energy company announced a negative impact on its ebit of 289 million euros.

The company of IBEX 35 He also conceded that, based on the performance of the first quarter and the vision for the rest of the year, he has to adjust his guidelines for a year 2022 in which he now contemplates a cut in his income between 2 and 9 percent.

The bad forecasts announced by Siemens Gamesa late on Thursday caused its value to fall on the stock market by up to 12.5 percent during Friday morning, and also led to its German parent company, Siemens Energy, to have to review your accounts in consecuense; a gesture that renews the pressure so that it puts order in its Spanish subsidiary.


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The market sees no short-term improvement in Siemens Gamesa

“Our worst omens are confirmed“, affirms the Renta 4 analyst, Ángel Pérez Llamazares, in his report on the preliminary results of Siemens Gamesa.

Although Perez Llamazares points out that he did not expect the review of these results to be so short-term, he did expect it to happen throughout this year “as a result of the global situation in the supply chain, which is coupled with the inability of the company to improve the situation of the onshore business that continues to weigh down the evolution of the group”.

Given these prospects, the analyst maintains a recommendation to underweight the titles of Siemens Gamesa, anticipating that the company’s share price suffers a severe impact due to this review of accounts, “which is negatively affecting the already diminished confidence of the market”.

Within the consensus of 26 analysts who follow the company, in fact, seven of them opt for buy or underweight recommendations, with 14 of them remaining neutral.

Bankinter has also been very pessimistic about this new profit warning from Siemens Gamesa, assuring that it is, again, a “negative surprise, due to external problems (supply problems and cost increase), but also internal (again problems are mentioned in the launch of the new 5X turbine, Onshore)”.

“We maintain our Sell recommendation as long as there is no visibility on the ability to make the activity profitable,” says the bank’s report, also adding that “we will revise our estimates downward again to reflect the new provisions and downward margins.”

A merger, logical?

The poor expected results for Siemens Gamesa in 2022 they would take the renewable company to its third year of losses, a fact that since Bloomberg Intelligence They look on with surprise, given their prospects for falling steel prices, “which proved to be a major cost factor against last year.”

The US company’s analysis service, however, predicts that the turbine manufacturer’s growth trajectory “could improve in 2023-24, given the growing demand for renewable energy.”

The problem for the national listed company is that this horizon seems far away, and along the way, there are several entities that have called Siemens Energy to make a firm decision regarding the control it exercises over Siemens Gamesa.

After a meeting with the financial director of Siemens Energy in December, Deutsche Bank released a report stating: “Management confirmed that a 67 percent stake in Siemens Gamesa It is a strange amount, and that they will go to 100 percent or 50.1%”.

And in the opinion of the German bank, “a complete merger between Siemens Energy and Siemens Gamesa and the consequent simplification of the group structure and decision-making processes would make sense, but the timetable for this remains unclear.”

Similarly, JP Morgan noted that the CEO of Siemens Energy has ensured that, in the short term, a separation of Siemens Gamesa could create value, but that, from a long-term perspective, “he believes there is more value in an integrated energy company”.

And in the eyes of the US bank, it is possible for the two companies to work together in the current structure with agreements under equal conditions, “but it is not the same as the benefits of a complete integration.”

The last alarms sounded in November

The latest drums takeover bid for Siemens Gamesa sounded last November, when the portal specialized in rumors about mergers and acquisitions, Betaville, assured that the possibility was on the table and that Goldman Sachs was participating in counseling on it.

Last May, Siemens Energy He came out against rumors that were already running through the market, assuring that he would not carry out the delisting takeover bid on the Spanish company.

A new forecast of negative results, however, rekindles the fire around that possibility, and the collapse in the price of the Spanish company’s shares make it a cheaper option than a year ago, when the titles of Siemens Gamesa They were around 26 euros.